A bitter fight to save screen quotaKorean films have never been stronger, both at home and internationally. Two domestic productions, “Silmido” and “Taegukgi,” both notched record-breaking sales of 10 million tickets earlier this year, and Park Chan-wook won the Grand Prix at the Cannes Film Festival, a first for a Korean director. Exports of Korean films are also at a new high.
Yet on July 14, famous actors and actresses, film directors and producers stood in the rain in front of Gwanghwamun, central Seoul, to demand that the government continue protecting local movies through the screen quota system, saying that the industry would collapse without it.
Currently, the screen quota requires movie theaters to show Korean films 146 days a year per screen, or 40 percent of the year. However, the quota allows a grace period of 40 days, which means theaters are required to show Korean films a minimum of 106 days a year.
Newly appointed Culture Minister Chung Dong-chea expressed his support for discussing a reduction of the screen quota when he addressed the National Assembly in early July. His remarks followed similar statements made in June by President Roh Moo-hyun and former Culture Minister Lee Chang-dong.
However, in a sign of how politically sensitive the issue is, another Culture Ministry official, Lee Jung-woo, insisted that the official ministry’s position is that it wants to “adjust” the quota, not “reduce” it.
The United States has repeatedly asked for the elimination of the quota as a condition for signing a Korea-U.S. Bilateral Investment Treaty, but recently it has asked for a reduction instead, down to 20 percent, or 73 days a year.
The screen quota has long been an obstacle to signing the treaty, and the Ministry of Finance and Economy, the Ministry of Foreign Affairs and Trade and business circles have called for a reduction in the quota.
Recently, there have been some hints that the United States may finally get what it wants. At the July 3 Korea-U.S./U.S.-Korea Business Council meeting in Seoul, Maurice Greenberg, the chairman of the U.S. council, said the treaty is expected to be signed this year. Joint statements by Cho Suck-rai, the chairman of the Korean council, and Mr. Greenberg also said the differences between the two sides have been narrowed and would be resolved in the near future.
Talk of a possible reduction doesn’t sit well with the local film industry professionals, who are worried about the state of their industry, even though Korean films’ market share here has been steadily increasing since 1999.
According to the Korean Film Council, domestic films held a 62-percent market share during the first half of the year, largely due to “Silmido” and “Taeguki,” compared with 47 percent from a year ago.
Seeking safety net
Much of the fear appears to be tied to a lack of confidence about the local film industry’s ability to consistently produce films Korean viewers would want to watch.
“When Korean movies are doing well like they are now, the screen quota is practically non-existent,” said You Chang-seo, a director of the Korean Association of Film Art & Industry. “But the screen quota is needed when Korean films are not doing well. The screen quota is a safety net for the film industry.”
Even though local theaters keep only 40 percent of the revenue from foreign films, compared to 50 percent of domestic films’ revenue, other quota advocates insist that foreign distributors have more bargaining power compared to domestic ones.
Yang Gi-hwan, an official at the Coalition for Cultural Diversity in Moving Images, said major U.S. distributors are likely to demand a higher share of box office revenue if the domestic film industry can’t produce enough good films, leaving the movie theaters with no other option but to play American films.
He said five U.S. distributors ― Buena Vista International, UIP, Columbia TriStar, Warner Brothers and Twentieth Century Fox ― exercise such great influence on local movie theaters that the theaters will play American films instead of Korean ones so they can get a chance to show the big-budget blockbuster movies during the peak summer and winter holiday seasons.
“If movie theaters could make a decision on their own without being influenced by these distributors, there would be no need for a screen quota,” Mr. Yang said.
However, Kim Hyoung-jun, a producer and head of Hanmak Films, said domestic distributors are just as likely to exercise their clout over movie theaters.
According to Culture Ministry official Mr. Lee, major domestic distributors such as Showbox, Cinema Service and CJ Entertainment distributed more films, including foreign ones, in Korea than their American counterparts. The three domestic distributors held more than 65 percent in market share in Seoul during the January to June period this year, while the five American distributors had 25.4 percent.
Kang Chul-keun, a senior official at the Culture Ministry, said that in 1985 the government increased the quota from 20 percent to 40 percent, but Korean films’ market share continued to decline until 1993.
It was not until 1993 that the screen quota was strictly enforced. That year, film industry officials formed the Coalition for Cultural Diversity in Moving Images to monitor movie theaters.
Under the law, movie theaters are suspended for the same number of days they exceeded the quota. After the coalition began checking theaters, the number of quota violations started to steadily decline. In 1997, it was an average of 20.43 days in 1997; 10.84 in 1998; 6.99 in 1999; and last year it was 0.12 days.
Quality of movies
Another big reason theaters have more incentive to show Korean films is that the film industry has been able to produce more commercial and critical hits. A spokesperson at the CGV multiplex theater chain, the biggest in Korea, said because local films have been commercially successful for the last several years, its theaters haven’t had to play unpopular Korean films just to meet the quota.
Mr. Kim of Hanmak also said nowadays movie theaters are less likely to hold on to unpopular U.S. films as a concession to Hollywood distributors.
Besides the screen quota, there are other factors playing into the renaissance of the Korean film industry, such as an easing of censorship and a growing amount of both private and government investments in the film industry, which all took place during the Kim Dae-jung administration.
Choi Wan of IM Pictures, a film investment company, said large conglomerates such as Samsung, Daewoo and SK entered multimedia industries for the first time in he early 1990s, though they all gave up their multimedia businesses because of the 1997-98 financial crisis.
However, Samsung Corp.’s multimedia arm was able to produce a hit in 1998 that marked a turning point in Korean cinema: “Shiri,” a thriller about North Korean espionage.
“After the success of Shiri, people came to a realization that the film industry can be ‘an industry,’” Mr. Choi said.
Before that, there was no separation between production and distribution, as the producer was responsible for investment, production and distribution. After “Shiri,” large distributors such as CJ Entertainment and Cinema Service emerged.
Growth in funds
The Kim administration poured an enormous amount of capital into the film industry beginning in 1999, through the Small Business Corp. and the Korea Film Council, and the money was again used to form a number of investment funds for multimedia industries, including animation and film. The amount managed by these investment funds skyrocketed from 5 billion won in 1998 to 36.2 billion won in 2003.
Local film industry professionals fear that the reduction in the screen quota would lead to less investment in domestic films. For one investor, Mr. Choi, a reduction in the quota would mean fewer chances for Korean movies to be shown in theaters, so he would be more selective in picking projects. The number of films produced in Korea could decline if the quota is cut, he added.
Despite the bitter battles, even screen quota advocates acknowledge that there is no direct relationship between the quota and the number of tickets sold to Korean films. The industry as a whole hasn’t managed to turn a profit under the quota system. According the Korean Film Council, in 2002, the film industry lost an estimated 34.4 billion won after spending 225 billion won on 45 films.
And though supporters say that the screen quota is needed to preserve the diversity of films, independent, art-house films don’t necessarily benefit from it. Lee Jung-woo, the Culture Ministry official, said Lee Chang-dong, before he became Culture Minister, had to beg movie theaters to play his critically acclaimed work, “Oasis.”
On Tuesday, the governing Uri Party said it would propose a bill that would create a “minority quota” for low-budget art-house films, which would compensate movie theaters for showing art-house films.
“The Korean film market has expanded, but a small number of local commercial films dominate the market at the expense of the diversity of films shown in Korea,” said Lee Mi-kyung, a congresswoman.
Like Mr. Lee of the Culture Ministry, the Uri Party congresswoman was reluctant to express outright support for a reduction in the overall quota, saying only that the party will discuss “the adjustment of the screen quota for the development of the Korean film industry.”
Local film industry officials criticized the move, calling it “an artifice devised to reduce the screen quota,” and said few people think it is possible that the domestic film industry could benefit from another quota.
by Limb Jae-un